By Scott Barber, VP of I&C, POWWR
For some time now news headlines have been full of stories of how inflation continues to make it difficult for businesses in the public sector and beyond. While it may seem new for businesses to be hyper-focused on cost savings, it is, of course, something they have always been conscious of to a greater of lesser extent. It is that just right now it is getting extra attention.
Energy procurement is one area where public sector businesses are, quite rightly, turning to in a drive to cut down on their costs in their drive to ultimately save money. The process of understanding and managing all the moving parts of energy procurement can be complex and tedious, but it has never been more important to make strategic energy purchases. Thankfully, energy procurement management companies are popping up more and more. They do what they say on the tin and their sole focus is on helping businesses purchase energy more proactively, so the business can make more strategic choices related to their energy usage. It is not a process to be sniffed at. Well-curated supply contracts can result in thousands of pounds in additional supply-side savings. But what is it that a public sector business should be looking for in an energy management procurement company?
Reliability
Of course, energy is central to everything a business does. A power cut generally results in a business being stopped in their tracks. It is important that a business does not get caught short. Make sure that the energy supplier chosen is one that can be trusted. Look at customer reviews and testimonials to see what other businesses think about them. Beyond testimonials, look at the energy procurement strategies they share on their website. Plus, ensure that each strategy is based on solid research and reports from brokers and sellers, and that as a customer you would have control over the plan on offer.
Cost savings
As we witness an unprecedented global shift towards renewable energy sources, energy suppliers are increasingly confronting new challenges. This transition, while essential for sustainability, introduces significant volatility in energy supply and costs. Factors such as the intermittent nature of solar and wind energy, compounded by geopolitical and environmental uncertainties, have made the energy market more unpredictable than ever and led to widespread price rises.
There are still deals out there, though, so make sure to shop around. Remember that sometimes the first deal seen is not the best. Do thorough research to seek out the best deal for the business when it comes to energy procurement, so the business is saving the most amount of money possible. Having said that if a deal seems too good to be true it probably is. Make sure to read the small print.
Value added
It is important that a public sector business does not get obsessed with just how much money they can save on their energy costs. Look at the possible benefits that are available through each supplier. What value do they add? Try to ascertain the process from start to finish. Remember, that the more information the better. It is impossible to research too thoroughly. Particularly if the organisation has certain environmental goals it needs to hit, ensure to find out how the energy procurement company goes about sourcing energy from a third-party energy supplier or local distribution company. Also look into how contracts are drafted, and what the implementation process will entail. Beyond that, ensure they can forecast future usage accurately so that the business can plan effectively.
Contract details
Different energy management procurement companies offer different contract types. These are often dependent on external factors like property-specific demand requirements and/or market drivers that influence the price. What kind of contract that works best can vary from business to business. Regardless though, make sure that whichever company is chosen to help with energy procurement has transparent pricing with no hidden fees or unforeseen charges.
The benefits of optimal energy procurement
While many public sector businesses understand the benefits of effective energy procurement, not all do. Now is the time to start. When done optimally, energy procurement lowers the risk of unforeseen charges, hidden fees, and costs. Plus, it provides more informed load forecasting, a more reliable source of fuel, and greater control over fuel costs and types. Hopefully this article has helped those public sector businesses on the fence understand the value of energy procurement. However, each business is different and has will have different requirements for their energy usage. Therefore, spend the time to ensure that the business is paired up with the right supplier.